Chris Bean is living one of an advisor’s worst nightmares.

Bean, an advisor with Private Advisory Group, a Redmond, Wash.-based RIA, is calling investors and becoming a public voice in the media after Lake Oswego, Ore., asset manager Aequitas Capital Management appears to have collapsed.

“These people were lying to my face,” Bean says. “Not just to me, but to my clients, too, who are now facing substantial financial losses. I’m angry that someone has put us into this position.”

On Tuesday, Aequitas Capital hired FTI Consulting to assist in restructuring and a likely bankruptcy.

Bean says the news of Aequitas’s problems took him by surprise. Around 330 of his clients have a portion of their assets invested with Aequitas, and he was adding to their positions as late as December 2015.

“We’re learning that their assets were overstated,” Bean says. “They had to restate their financials and what originally looked like $650 million in book value quickly went to $321 million of unsubordinated assets in private notes that weren’t even worth the $321 million.”

Bean invested money on behalf of more than half of his clients in Aequitas’s private notes, which promised a return of 8 percent to 12 percent with little to no risk, while offering 90-day liquidity. “They were offering substantially higher than market rate returns for what we thought was less risk,” Bean says. “We’ve been working with them for six years.”

Those promises may have been too good to be true, says Bob Banks, a securities litigator at Samuels, Yoelin and Kantor, a Portland, Or., law firm.

“If you read any of the prospectuses on the secured subordinated notes, the subordinated positions are so significant that there wasn’t much in the way of security,” Banks says. “They were telling people these were 90-day revolving notes. I think that fits the category of ‘too good to be true.’”

Samuels, Yoelin and Kantor has launched an investigation into Aequitas’s practices on behalf of several investors.

One of Banks’ clients had over 50 percent of their assets invested in Aequitas products.

“I’m particularly hearing from people who had invested in the last 60 days because they were advised to do so by their investment advisor,” Banks says. “I think the advisors who told clients to get into this in 2015 and 2016 are going to have real problems with breach of fiduciary duty claims.”

Bean was assured of Aequitas’s ability to deliver on its promises after clean audits from New York-based consultants Deloitte and after reviewing the company’s financials.

“As it turned out, they really didn’t have good enough reserves to meet their short-term cash needs,” Bean says. “Not only did they understate their cash issues, they were dramatically understating the underlying assets.”

One of Bean’s clients, a San Francisco-area attorney, had invested as much as $600,000 in Aequitas products. Bean placed some of his mother’s retirement into the notes, but none of his clients had more than 10 percent of their total assets wrapped up in Aequitas products.

“Most of those clients had some portion of these products in their retirement,” Bean says. ”Due to our own internal controls, nobody was in for more than 10 percent.”

Some of Bean’s involvement in Aequitas came after absorbing assets from another firm, Strategic Capital, that had over $100 million invested in Aequitas products. As part of that deal, Aspen Grove Equity Solutions, a firm owned by Aequitas and its leadership, ended up with a majority stake in Private Advisory Group. Until that deal, Bean had only a small amount of client assets placed with Aequitas.

Banks questions whether the investments were suitable in the first place.

“I’ve heard that advisors are accusing Aequitas of misleading them with questionable financial reports, but they aren’t sharing those reports with their clients,” Banks says. “At the end of the day, even if there wasn’t fraud or any of these problems with Aequitas, to have someone put half of their assets into these funds is highly questionable.”

Many advisors were receiving commissions, some as high as 2 percent, for selling Aequitas products, Banks notes.

“I have a feeling that we’re going to find that the compensation to RIAs for offering these products was substantial,” Banks says. “Why else would they do it? Selling Aequitas investments in 2015 and 2016 in retirement accounts was like selling tickets on the Titanic after it hit the iceberg.”

Despite that an Aequitas affiate owns a 68 percent of his firm, Bean claims that he rejected Aequitas’s commissions, but was attracted to Aequitas’s promises of high returns and their mostly clear track record. The firm even passed muster during Private Advisory’s due diligence efforts.

“We do onsite interviews, logic tests and interview management and rank-and-file staff,” Bean says. “We had multiple firms doing additional due diligence, but even the best due diligence can’t always identify fraud. In hindsight, we’ve hired a consultant firm to come back and audit our process, but I don’t know if we could design a due diligence process that would guarantee catching something like this.”

Bean expects his business to survive despite the collapse. Today, he’s doing his best to keep his clients up to date.

“Almost without exception they are thanking us for navigating this on their behalf, and they appreciate the open and honest communication,” Bean says. “The anger for the most part is where it should be, with Aequitas, who misrepresented themselves and were negligent, if not fraudulent, in reporting their financials.”

The disintegration of Aequitas Capital has been as sudden as it was unexpected. After growing into a $1.7 billion alternative asset manager specializing in buying bad educational, medical and consumer debt, the firm is now a skeleton of its former self.

The first sign of trouble came in July 2015, when private for-profit college administrator Corinthian Colleges shuttered its doors after Aequitas had bought $600 million in student loan receivables from Corinthian in 2011.

At the time of Aequitas’s investment, Corinthian’s loans were backed by the U.S. Department of Education, but the college system allegedly failed to maintain federal standards for non-predatory lending and debt management practices. Aequitas’s involvement allowed the schools to issue more than 100,000 new student loans. Today, many of the loans are in default, and the college system is under pressure to forgive others, with some students refusing to make payments.

However, through the fall of 2015, Aequitas allegedly assured investors that it was in good shape financially—it added several executives and opened a posh New York City office and continued to lead investments. It predicted that it would quadruple the size of its portfolio to $4 billion by 2018 and add another $6 billion in assets from advisors during a November 2015 conference.

“In the third quarter of last year, they said that they may have a cashflow timing issue,” Bean says. “That is what they said up until the day they acknowledged they were insolvent.”

In early January, Aequitas was continuing to accept new investments, but days later told advisors that it didn’t have sufficient cash to make payments on private notes that were coming due.

Even then, Bean alleges that Aequitas was reassuring investors. In a face-to-face meeting with company executives in mid-January, he was told that Aequitas was facing temporary cash-flow problems that would soon be settled.

At the end of January, Aequitas laid off 30 of it’s employees. Days later, in early February, the company announced that it was cutting nearly 75 percent of its workforce—a company that had over 120 employees at the beginning of the year dwindled to 40 staff members. In recent weeks, two of the company’s senior partners have resigned.

“Aequitas Capital Management is taking aggressive measures to address the challenges facing the firm and investors in fund managed by affiliates of the firm,” an Aequitas spokesperson said in a Tuesday statement. “ACM has decreased operating expenses by, among other things, reducing headcount at ACM and other operating affiliates.”

Last week, Aequitas announced that it is liquidating two mutual funds, the Aequitas Income Fund and the Aequitas Income Opportunity Fund to repay investors, but the process could take up to two years. What was once a fully functioning, interactive website has been replaced by a static graphic with Aequitas’s contact information.

Aequitas says it is forming an advisory panel of investors and RIAs to help liaise between itself and investors and to assist in charting a course forward.

“RIAs seem to think that they are going to get a vote in what course of action Aequitas takes moving forward,” Banks says. “That’s what they’re telling their clients, and they’re putting it in writing. I’m not sure that’s prudent. It seems like a lot of people are panicking right now.”

The SEC and the Consumer Financial Protection Bureau are allegedly investigating Aequitas. An SEC spokesperson declined to comment on the matter.

As of Wednesday, Aequitas has not publicly commented on the cause of its financial woes or admitted any wrongdoing.

“We regret that we trusted these people,” says Bean.”At this point, we’re going to work with the liquidation firm to maximize our investors’ return and recovery.”